What are Log Book Loans & Logbook Loan Benefits

One of the newest forms of loans to hit the financial markets is logbook loans, especially in the UK. Even though it isn’t that new not a lot of people have heard of them and if they have heard of them they don’t really know anything about them. So the purpose of this article is to enlighten you to what logbook loans are and the benefits they hold.

What Are Logbook Loans?
You have probably heard of unsecured and secured loans, well logbook loans are a type of secured loan where the collateral used is on the vehicle that you own. You basically secure the loan against the logbook of your vehicle rather than your house which ideal for those that don’t own their own homes or those that want to avoid putting down their homes as a form of collateral.

The Advantages of Logbook Loans
Logbook loans are a great way of getting hold of cash without the lengthy process of applying for a loan, as once the lender has your logbook they can quickly assess the value of your vehicle and give you an accurate figure on how much you can borrow against it. These types of secured loans are often very popular for people with a less than perfect credit history as they can basically get the cash they need without having to go through extensive credit checks which often result in refusal or time a sometime to complete.

The Disadvantages of Logbook Loans
As with all other types of loans there is always a risk factor involved and just like a standard mortgage, your car is at risk if you do not keep up your repayments on the logbook you have took out. Now if you bear in mind that a personal car or van is probably your only means of getting to and from work, you need to think long and hard if borrowing money against it is a wise choice as if you lose your vehicle, you will have to find less reliable forms of travel such as public transport which can be very crowded and stressful.

You should also be aware that if you lose your vehicle and your credit rating is affected due to missing repayments, then you may struggle to be able to finance another vehicle unless you can pay for it in cash.